Examining Intergraph's PSIM Plus / Security OfferingBy: John Honovich, Published on Oct 19, 2010
Intergraph provides one of the most commonly used solutions for public safety management and an expanding integrated security management solution. Moreover, it is a large company, acquired for over $2 Billion in October 2010.
During ASIS 2010, Intergraph started to market a PSIM "Plus" solution. This fits into an interesting security industry trend where many companies are positioning their solutions as PSIM.
In the Pro section of this report, we examine the key applications, features, components and pricing of Intergraph's security and PSIM offerings. We will show how Intergraph is positioned at the higher end of the PSIM market with feature sets and implementation constraints that match much better to very large projects than to mid size applications common in the commercial security sector. We then look into specific applications, pricing and key features offered.
Intergraph reported overall 2009 revenue of $770 Million USD and projects about 7% growth for 2010. In July 2010 Swedish firm Hexagon (publicly traded -HEXAB) announced its intent to acquire Integraph for $2.125 Billion (approximately 3x earnings).
The acquisition presentation provides important details of Intergraph's financial performance:
- Integraph has 2 divisions - (1) Process, Power and Marine and (2) Security Government and Infrastructure (SGI)
- The SGI group (more relevant to security) reported $454 Million in 2009 revenue
- Within SGI, Public Safety and Security projects accounted for 32% of the group's revenue - an estimated $145 Million
Intergraph estimates that for security specific projects alone 2009 revenue is approximately $30 Million (which is likely close to all the PSIM startups combined). However, as we examine below, that revenue is generated from a relatively small number of fairly large projects.
Intergraph reports approximately 20 developers and 40 field personnel dedicated to the security market. This is in addition to the developers/staff working on core technologies that are leveraged by the security applications (this is discussed further in the components section)
Approach to Public Safety and Security Market
Intergraph started in the public safety market with their CAD solution in 1989 and have expanded and evolved from that core market/application.
For the security market, Intergraph focuses on larger applications for organizations that dispatch and manage their own response teams. Such applications leverage and benefits from Intergraph's core public safety market where Intergraph provides CAD based incident management systems to numerous large municipalities/governments.
Intergraph says they target 3 applications within security:
- Border Security
- Anti-Terrorism / Force Protection
- Airports / Larger Transit agencies
By contrast, they do not focus on commercial projects nor mid size facility based projects. This is the basis of their PSIM 'Plus' positioning. While PSIM providers would normally target integrating systems for corporations, ports and facilities, Intergraph targets even larger and more complex projects.
Intergraph leverages and integrates a variety of functions from across their projects. Two of the most important are (1) incident management and (2) geospatial mapping integration. On the incident management side, they offer sophisticated reporting and workflow tools (similar to what they provide for inter agency coordination for public safety workers - fire, police, etc.). On the geospatial side, their mapping engine geolocates the position of building, objects and security components (this requires services as explained below). With this geolocation in place, Intergraph can enable advanced functionalities. A few examples include:
- Identifying the nearest camera relative to an alarm or tracked object and then automatically calling up that camera
- Displaying on maps where cameras can see with great precision (including displays where occlusions occur due to facilities or objects in the way)
- Control PTZs precisely by an operator clicking on a map (the system automatically calculates the correct pan tilt zoom coordinates based on its recording of geolocations)
- Tracking an object precisely and accurately with a PTZ camera based on the real time input of a RADAR system
Components and Pricing
Intergraph offers a very modular product offering which allows for great optimization but also demands significant on-site customization.
Intergraph offers dozens of components that can be combined in various combinations for different solutions depending on the end user's need. A good overview of the items and pricing can be found by reviewing an Intergraph component price list from a US state contract. The list is long and can be overwhelming to digest. Here is an overview of key components used in Intergraph's security offering:
- I/Executive is the server/management component
- I/Executive 2 is the failover server component option
- I/Dispatcher is the thick client
- I/NetViewer is the web interface license
- I/Mobile and Mobile for Public Safety are the mobile client options
- Various components for alarm, tracking, incident management, radio, firestation, etc., etc. that can be selected as needed
For integration with various security systems, specific components are added. For instance, integration with a VMS system requires I/Sight, video analytics requires I/Sensor, etc. Currently, Intergraph has completed full VMS integrations with Cisco and Verint Nextiva. They additionally report server integration with Genetec (but no live video display inside their clients). The number of security systems integrated is quite limited.
A basic system will run $100,000+ in product costs (as most components have an MSRP in the tens of thousands each). Intergraph estimates that software is 30% of the cost of the average project (with 10% for hardware and the balance for services).
Intergraph's approach is to provide heavy on-site customization, optimization and development of data structures, shift rosters, response plans, etc. The estimated cost includes commissioning/turnover.
Most projects that Intergraph deploys are $500,000 or more. Intergraph provided estimates of $500,000 to $1 Million for a military base and $2 Million for an airport (depending on exact configurations/requirements, etc.)
Because of the size of the project and extensive customization, Intergraph often sells directly to large end users. On some occasions they partner or go through integrators/contractors for large infrastructure projects. Intergraph does not offer COTS products for integrators to re-sell.
This analysis should make clear the high level positioning of Intergraph in the security / PSIM market. The solution is designed for very large projects with demands for customization and real-time force dispatch/management. Both the go to market strategy and customization/optimization needed/provided are significantly different than commercial PSIM / integrated security offerings - which have far more emphasis on turn-key COTS solutions.
A future question we would like to address is: What is the competitive tradeoffs between Intergraph and PSIM providers for the very large scale market?